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Recruitment, Relocation and Retention Incentives

In each of the years 2008 through 2010, each agency that uses a retention incentive for an employee likely to leave for another Federal position must include in its report—

A description of how the authority to pay retention incentives was used by the agency during the previous calendar year;

The number and dollar amount of retention incentives paid during the previous calendar year by occupational series and grade, pay level, or other pay classification;

The agency (which may be in the executive, judicial, or legislative branch) to which each employee would be likely to leave in the absense of a retention incentive;

Each employee’s official worksite and the geographic location of the agency (which may be executive, judicial, or legislative branch) for which each employee would be likely to leave in the absence of a retention incentive; and

An agency must narrowly define a targeted category of employees using factors that relate to the group or category‘s unusually high or unique qualifications (i.e., competencies) or the agency‘s special need for the employees‘ services and the high risk that a significant number of the employees will leave the Federal service or for a different Federal position in the absence of a retention incentive. Factors that may be appropriate include the following: occupational series, grade level, distinctive job duties, unique competencies required for the position, assignment to a special project, minimum agency service requirements, organization or team designation, geographic location, and required rating of record. (While a rating of record of higher than "Fully Successful" may be a factor used in defining the targeted category, a rating of record by itself is not sufficient to justify a retention incentive.) Each retention incentive authorized for a group of employees likely to leave for another Federal position may cover no more than one occupational series. (See 5 CFR 575.306(c)(2) and 575.315(d)(4).)

An authorized agency official who is at least one level higher than the employee’s supervisor must review and approve each determination to pay a recruitment or relocation incentive, unless there is no official at a higher level in the agency. See 5 CFR 575.107(b) and 575.207(b) for additional exceptions. We encourage agencies to delegate authority to approve incentives to the lowest level practicable to help respond more effectively to their staffing needs.

Yes. Under 5 CFR 575.205, an agency may pay a relocation incentive to an employee of another agency to relocate to a different geographic area without a break in service to accept a position that is likely to be difficult to fill.

Agencies may pay a retention incentive to a current employee in the following categories of positions: General Schedule (GS); senior-level and scientific or professional (SL/ST); Senior Executive Service (SES); Federal Bureau of Investigation and Drug Enforcement Administration (FBI/DEA) SES; law enforcement officer (LEO); Executive Schedule (EX); prevailing rate (wage) positions; and positions in a category for which payment of retention incentives has been approved by OPM at the request of the head of an executive agency. (See 5 CFR 575.303 and 575.315(b)(1).)

An agency may pay a retention incentive in installments after the completion of specified periods of service or in a single lump sum after completion of the full period of service required by the service agreement. (See 5 CFR 575.309(b).) Installment payments must be consistent with biweekly pay periods, e.g., every 2 pay periods, 6 pay periods, or 8 pay periods. An agency may not pay a retention incentive to an employee likely to leave for a different Federal position in biweekly installments at the full retention incentive percentage rate established for the employee. See 5 CFR 531.315(e)(2).

The required service period must begin upon commencement of service with the agency for a recruitment incentive, and upon commencement of service at the new duty station for a relocation incentive. In both cases, the required service period must terminate on the last day of a pay period. (See 5 CFR 575.110(b) and 575.210(b), including the exceptions under 5 CFR 575.110(b)(2) and (b)(3) and 575.210(b)(2) and (b)(3).)

The total amount of recruitment or relocation incentive payments may not exceed 25 percent of the annual rate of basic pay of the employee at the beginning of the service period multiplied by the number of years (including fractions of a year) in the service period (not to exceed 4 years). (See 5 CFR 575.109(b) and 575.209(b).) With OPM approval, this cap may be raised to 50 percent (based on a critical agency need), as long as the total incentive does not exceed 100 percent of the employee’s annual rate of basic pay at the beginning of the service period. (See 5 CFR 575.109(c) and 575.209(c).)

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